Category Archives: Cryptocurrency

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May 2022 Crypto Enforcement Actions and Regulatory Guidance Roundup

Photo of Michael GilbertPhoto of Gabriel KhouryPhoto of Zachary GoldaBy Michael Gilbert, Gabriel Khoury, Zachary Golda and Brandon Mohamad* on Posted in Cryptocurrency
In May, we saw a slower month for crypto enforcement actions by state and federal regulators. See our March 2022 Crypto Enforcement Actions Roundup blog here where we discuss the regulatory guidance and jurisdiction of federal and state agencies to enforce these matters. Federal and State Updates Securities and Enforcement Commission (SEC) On May 3, … Continue Reading

Governor Newsom Signs Blockchain Executive Order

Photo of James GattoPhoto of Moorari ShahPhoto of Sarah AbergPhoto of A.J. DhaliwalPhoto of Gabriel KhouryBy James Gatto, Moorari Shah, Sarah Aberg, A.J. Dhaliwal and Gabriel Khoury on Posted in Cryptocurrency
In an apparent follow up to President Biden’s March Executive Order on Digital Assets (which we previously discussed here), this week, California Governor Gavin Newsom signed a similar executive order aiming to foster responsible innovation, bolster California’s innovation economy, and strengthen consumer protection through creating a transparent regulatory and business environment for Web3 companies.  Newsom’s … Continue Reading

New York’s Superintendent of Financial Services Addresses BitLicense Delays

Photo of Sarah AbergPhoto of Gabriel KhouryBy Sarah Aberg and Gabriel Khoury on Posted in Cryptocurrency, Regulatory
This January, Adrienne A. Harris was confirmed as superintendent of New York’s Department of Financial Services, which administers New York’s BitLicense program, among others.  In a March 28 interview, Harris discussed the BitLicense program in detail and addressed some of its longstanding issues, including its slow response times to applicants and updating some of the … Continue Reading

Recent Transaction Transfers Ownership of Digital Mortgage Loans via Blockchain

Photo of Moorari ShahPhoto of A.J. DhaliwalPhoto of Gabriel KhouryBy Moorari Shah, A.J. Dhaliwal and Gabriel Khoury on Posted in Cryptocurrency
In a novel transaction for the blockchain and mortgage industries, a blockchain-focused financial services company and an investment firm announced the completion of a transaction involving the origination of digital mortgage loans and transfer of ownership via blockchain technology. The eNote digital mortgage assets were originated on the Provence Blockchain and registered on the financial … Continue Reading

House Financial Services Committee Focuses on PWG Stablecoin Report

Photo of Moorari ShahPhoto of A.J. DhaliwalPhoto of Gabriel KhouryBy Moorari Shah, A.J. Dhaliwal and Gabriel Khoury on Posted in Cryptocurrency
On February 8, the House Financial Services Committee held a hearing titled, “Digital Assets and the Future of Finance: The President’s Working Group on Financial Markets” to consider legislative recommendations from the President’s Working Group (PWG) report on stablecoins (we previously discussed the report in an earlier Consumer Finance & FinTech Blog post here).   … Continue Reading

US Crypto Regulatory Enforcement Ramps Up – NFTs Now More in Focus

Photo of James GattoBy James Gatto on Posted in Blockchain, Cryptocurrency
For the past decade the crypto space has been described as the wild west. The crypto cowboys and cowgirls have innovated and moved the industry forward, despite some regulatory uncertainty. Innovation always leads regulatory clarity. There’s a new sheriff in crypto town – the US government and its various regulatory agencies. They seem intent on … Continue Reading

NYAG’s Warning to Crypto Businesses Muddies Regulatory Waters

Photo of Christopher BoschBy Christopher Bosch on Posted in Cryptocurrency
New York’s chief law enforcement agency recently squandered an opportunity to bring much needed guidance to the digital assets space.  On October 18, the Office of New York Attorney General Letitia James (“NYAG”) issued a press release warning New York businesses offering interest-bearing accounts to customers who deposit virtual currency with them without having registered … Continue Reading

Tokenization: Opportunity and Regulation, Finding a Balance

Photo of William KanePhoto of Zachary GoldaPhoto of William de Sierra-PambleyBy William Kane, Zachary Golda and William de Sierra-Pambley on Posted in Blockchain, CFTC, Cryptocurrency, SEC
Tokenization Tokenization limits the exposure of sensitive information and makes digital transactions more secure.  Whether people realize it or not, millions of Americans already use tokenization technology on a daily basis.  Recent developments in blockchain systems and decentralized finance create new uses for tokenization, raising legal questions as to how existing regulatory frameworks will apply … Continue Reading

A September to Remember: Coinbase Avoids SEC Clash by Dropping Crypto Lend Product

Photo of Christopher BoschBy Christopher Bosch on Posted in Cryptocurrency
Last week, Coinbase Global Inc. (“Coinbase”) headed off confrontation with the Securities and Exchange Commission (“SEC”) by announcing it was shelving a much ballyhooed digital asset lending product, Lend.  The announcement came two weeks after Coinbase revealed that it had received a Wells notice from the SEC warning the company of its plans to sue over Coinbase’s planned October … Continue Reading

New York Attorney General Sues to Shutter Cryptocurrency Trading Firm Coinseed

Photo of Christopher BoschBy Christopher Bosch on Posted in Cryptocurrency
The Office of New York State Attorney General Letitia James (“NYAG”) has filed a lawsuit to shut down technology company Coinseed.  The state has accused the firm of selling unregistered securities in the form of digital tokens and operating as an unregistered broker-dealer while making material misrepresentations about the company, its management team, and fees charged to … Continue Reading

FinCEN Announces Intention to Require FBAR Reporting of Crypto Currency

Photo of James GattoBy James Gatto on Posted in Cryptocurrency, FinCEN, Regulatory
FinCEN has issued a notice that it intends to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account under 31 CFR 1010.350. Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign … Continue Reading

Office of the Comptroller of the Currency Affirms Authority of a National Bank to Provide Cryptocurrency Custody Services

Photo of Shane KilleenPhoto of Sarah AbergBy Shane Killeen and Sarah Aberg on Posted in CryptoAssets, Cryptocurrency, FinCEN, Regulatory, Virtual Currency
The Office of the Comptroller of the Currency (“OCC”) recently signaled its approval for banks to fully wade into the cryptocurrency custodian space.  On in a July 22, 2020 interpretive letter, the OCC concluded that a national bank may provide cryptocurrency custody services on behalf of its customers, including by holding the unique cryptographic keys … Continue Reading

The United States-Mexico-Canada Agreement – Paving the Way for a Cross-Border Fintech Sandbox

Photo of Emilio CazaresPhoto of Curtis DombekBy Emilio Cazares and Curtis Dombek on Posted in Bitcoin, Cryptocurrency, FinCEN, Regulatory, Virtual Currency
Key Takeaways The United States-Mexico-Canada Agreement (USMCA) provides for financial and digital trade regulations that harmonize the treatment of fintech companies. North American companies leveraging digital assets for payments should consider strategic regional opportunities available under the new USMCA fintech Framework. The USMCA Parties (member countries) continue to license fintech companies using cryptocurrency and create … Continue Reading

FinCEN Director Addresses COVID-19 Related Virtual Currency Issues at Consensus Blockchain Conference

Photo of Sarah AbergPhoto of Shane KilleenBy Sarah Aberg and Shane Killeen on Posted in Cryptocurrency
On May 13, 2020, Financial Crimes Enforcement Network (“FinCEN”) Director Kenneth Blanco delivered remarks to the Consensus Blockchain Conference regarding the agency’s recent observations in connection with virtual currencies, including the current risks of criminal exploitation of virtual currency, significant issues FinCEN anticipates for virtual currencies in the future, and the industry’s compliance with the … Continue Reading

Cryptocurrency Miners I“rate” At Energy Rate Decision

Photo of James GattoBy James Gatto on Posted in Cryptocurrency
A Washington state federal court recently addressed claims relating to rates that cryptocurrency mining companies pay for electricity in Grant County, Washington. The court rejected all of the miner’s legal claims. The dispute focused on the rate classification that this utility applied to crypto miners as explained below.  Due to various risks, the electric utility … Continue Reading

Blockchain Technology Continues to Support a Flourishing Music Industry

By Sheppard Mullin on Posted in Blockchain, Cryptocurrency
For the first time since 2007, the Recording Industry Association of America is reporting that the United States retail music market is on its way to becoming a $10 billion market. Streaming royalties account for a majority of this growth along with new use cases entering the marketplace. New technologies and content offerings have and continue … Continue Reading

FinCEN – We Will Identify Where Compliance Is Not Taking Place And Take Appropriate Action

Photo of James GattoBy James Gatto on Posted in Bitcoin, Blockchain, CryptoAssets, Cryptocurrency, FinCEN, Initial Coin Offerings, Regulatory, Virtual Currency
Last week we reported that FinCEN had issued new guidance addressing cryptocurrency and other convertible virtual currency. The need for compliance was reinforced this week. In a speech by Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence, during blockchain week in NY, a stern warning was issued. The message was clear. Regulatory compliance is … Continue Reading

FinCEN Updates Guidance on Crypto

Photo of James GattoBy James Gatto on Posted in Bitcoin, Blockchain, CryptoAssets, Cryptocurrency, FinCEN, Initial Coin Offerings, Regulatory, Virtual Currency
FinCEN has issued  2 new guidance documents addressing cryptocurrency and other convertible virtual currency (CVC). The guidance does not establish any new regulatory expectations. Rather, it consolidates current FinCEN regulations, guidance and administrative rulings that relate to money transmission involving virtual currency, and applies the same interpretive criteria to other common business models involving CVC. … Continue Reading

What Game Companies Need to Know About FinCEN’s Updated Guidance on Virtual Currency

Photo of James GattoBy James Gatto on Posted in Cryptocurrency, FinCEN, Virtual Currency
FinCEN has issued updated guidance addressing the use of crypto currency and other convertible virtual currency (CVC). A portion of this guidance addresses the use of CVC in games. The guidance does not establish any new regulatory expectations. Rather, it consolidates current FinCEN regulations, guidance and administrative rulings that relate to money transmission involving virtual … Continue Reading
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